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Wall Street stocks rally on hopes of recovery

Wall Street stocks rally on hopes of recovery

U.S. stocks surged to their highest levels in months Monday as sentiment was lifted by a surprisingly upbeat report on U.S. home sales and Chinese data that raised hopes for a global economic recovery.
The Dow Jones Industrial Average rallied 214.33 points (2.61 percent) to close at 8,426.74, as the blue-chip index hit its highest level since Jan. 13.
The tech-heavy Nasdaq lifted 44.36 points (2.58 percent) to 1,763.56, its best close since last November.
The Standard & Poor's 500 climbed to its best close since January 8 with a gain of 29.72 points (3.39 percent) to 907.24 that put the broad-market index into positive territory for the year.
The S&P index is now up 0.44 percent for 2009, which after the long bear market "could help to bolster confidence," said Nick Perry at Schaeffer's Investment Research.
Market action came as a real estate industry group said pending U.S. home sales rose 3.2 percent in March after a 2.0 percent increase in February.
"A bottom in home sales is becoming more visible as improved affordability and government incentives draw potential buyers back into the market," said Ryan Sweet at Economy.com.
Analysts at Charles Schwab & Co. said that "a positive manufacturing report in China, which fueled a strong rally in Asia, is helping improve sentiment on the Street and further the argument that the worst of the global recession may be in the rearview mirror."
The CLSA China Purchasing Managers Index, or PMI, a closely watched indicator in the world's third-largest economy, rose sharply to 50.1 in April from 44.8 the previous month. It was the first expansion in nine months.
Brian Wesbury at First Trust Portfolios said that he believes that based on recent U.S. data on housing, consumer spending and other areas, the recession is now over. "Now it looks like our V-shaped recovery is underway," he said. The mood was also helped by news from two major banks indicating they did not seeking to raise large amounts of new capital despite worries about the result of the government's stress tests to be released later this week.
Bank of America rallied 19.31 percent to US$10.38 after it denied a report it was seeking US$10 billion in fresh capital.
Rival JPMorgan Chase rallied 10.16 percent to US$35.79 after chairman and chief executive Jamie Dimon told an analysts conference he did not see a need for the firm to raise new capital.
Elsewhere in the sector, Citigroup added 7.74 percent at US$3.20 and Wells Fargo surged 23.66 percent to 24.25.


Updated : 2021-06-14 11:51 GMT+08:00